If you’ve ever had to write a business plan, then you know how important it is to have a clear vision and purpose. A strong business plan has the power to transform your company into something that’s truly remarkable so much so that writing one can almost feel like magic!
But like any art form, writing a winning business plan takes time and effort. To help make this process easier for you, we’ve outlined eight steps to follow when writing your proposal:
| Takeaway |
|---|
| Focus on the one key element |
| Craft a winning business plan in 8 steps |
| Identify the critical factor for success |
| Emphasize uniqueness and value proposition |
| Address investor concerns effectively |
| Utilize market research and analysis |
| Highlight financial projections |
| Showcase solid understanding of the market |
| Keep the plan concise and to the point |
| Tailor the plan to your business needs |
Step 1: Write Down Your Purpose
The first step in writing a winning business plan is to write down your purpose. What problem are you solving, and how does it benefit your customers? Why do you want to start this business? What will be different about the way we do things than what people have experienced before? When I’m coaching clients, one of the first questions I ask them is “Why?”
- What problem are you solving?
- How are you going to solve it better than anyone else out there or in this industry (if applicable)?
Why do people need this service or product and why should they choose yours over others’ or even not choose yours at all if they don’t need it?
Writing a business plan is the first step towards turning your ideas into reality. Learn how to craft a compelling plan in 9 simple steps with our guide on how to write a business plan in 9 simple steps.
Step 2: Research Your Audience And Competition
Now that you’ve identified your audience, it’s time to learn more about them.
What are their needs and pain points? What do they value? How do they make choices? What are their spending habits and behaviors? When it comes to your target customer, what does the data say about them?
These questions can help you understand who your potential customers are and how best to address them. You’ll also want to research any legal restrictions on selling products or services in the market where your business will operate (for example, if there’s a law against selling certain types of alcohol).
Taking your business plan from good to great requires careful consideration. Discover the one key that can turn your business plan into a winning document with our guide on the one key to writing a winning business plan in 8 steps.
Step 3: Ask Open-Ended Questions
In this step, you’ll be asking lots of questions. The reason is simple: your audience will only give you the answers they think are appropriate, and if you don’t ask them the right questions, you’re not going to get much useful information at all.
For example, if a potential customer has been asked “How was your experience with our product?” and their response is “Good! Very good! I loved it!” there isn’t much more room for exploration or improvement yet.
But if a potential customer has been asked “What do you like about our company? How did we make your experience better than other companies? What kept us from delivering on what we promised?” then that person might have some great feedback for improving their business (and perhaps yours).
Step 4: Include A Timeline
One of the most important parts of an effective business plan is a timeline. A timeline helps you organize your thoughts and keep track of what you need to do next. To create a timeline, first, decide on the major milestones for your business plan. For example, if you’re applying for funding from investors or lenders, these are key milestones:
You will have to submit an executive summary at least three months before your full business plan is due.
Your executive summary needs to be submitted no later than six months after submitting your initial application forms if you want it considered by a panelist (and not just by an automated system).
The date by which all members of the panel must vote on whether or not they approve this project will be decided based on when all members receive their packets and begin reviewing them;
However, this date cannot come before January 1st in any given year so even though we may start accepting applications as early as October 31st each year, our final deadline won’t come until December 31st at midnight Eastern Standard Time (EST).
Investors play a crucial role in the success of your business. Find out how to create a business plan that captures their attention and keeps them engaged in our comprehensive guide on how to write a business plan that investors actually read.
Step 5: Empower Your Team To Make Decisions
Empower your team to make decisions. The fifth step of the business plan process is empowering your team to make decisions on their own.
By giving them this responsibility, you promote a sense of empowerment and ownership in addition to allowing them to develop autonomy and adaptability skills.
If you’re not sure where to start with this one or how best to approach it, check out our guide on empowering employees: How To Teach Employees To Make Their Own Decisions
Step 6: Set Measurable Benchmarks
Before you embark on your journey, it’s important to have a clear idea of where you want to go. This can be achieved by setting goals, which will give you something tangible to work toward as well as help keep you motivated along the way.
You also need to consider what kind of timeframe would be realistic for achieving those goals and this is where many people make their first mistake.
Many people set their sights too low when they start, thinking they can’t do more than they’re already doing or believing that if they set a high bar for themselves, it’ll never get done.
But when we look at examples like exercising more or developing good eating habits over long periods (three months and six months), there are many things we can achieve if we put our minds to it!
Every successful business plan answers essential questions. Discover the 12 key questions that your business plan should address by checking out our article on 12 questions every business plan answers.
Step 7: Outline The Finances Of Your Business Plan
This step is the most important part of your business plan. Here you will outline the finances of your business, showing the total revenue and costs for the year. If you are in a service industry or have a free product, this section will help investors determine if they can make money on your product or service.
To complete this section effectively, first, create a cash flow statement (or “cash flow projection”) that shows how much money you expect to receive each month over one year period. Do not include any income that might come from loans or other sources outside of normal business activities.
Next, use an accounting software program or another practical tool to create a balance sheet that shows assets (property), liabilities (debts owed), and owner’s equity at various points in time during the 2017-2018 fiscal year (start-up dates).
Finally prepare profit/loss statements for each month within those two years so that potential investors can see how well their investment may perform by looking at past performance data instead of just relying on projections alone!
Step 8: Revisit Your Plan Regularly And Update As Needed
Congratulations, you’ve reached the end of this post! You now have a solid business plan that will help guide your business through its launch and lifetime. But don’t let the work stop here; after all, it’s only the beginning.
A good plan needs to be reviewed regularly to ensure it’s still aligned with your goals and vision for the future of your business. If anything changes or shifts in the market, update accordingly!
A well-crafted business plan is a powerful tool for any entrepreneur. Learn why you should invest time in writing a business plan and how to get started in our guide on why you should write a business plan and how to do it.
Conclusion
The key to a successful business plan is taking the time to write one that reflects your values and goals. Your plan should be an evolving document that adapts as you grow, so it’s important to revisit it regularly and update it accordingly. If you have any questions or need help writing your plan, contact us today!
Further Reading
NerdWallet: How to Write a Business Plan Short Description: Learn valuable tips and steps for crafting a comprehensive business plan from NerdWallet’s expert advice.
ContractsCounsel: How to Write a Business Plan Short Description: ContractsCounsel provides a detailed guide on writing an effective business plan, including legal considerations.
Wellers Accountants: 8 Key Elements of a Business Plan You Need to Know Short Description: Discover the essential elements that make a business plan successful with insights from Wellers Accountants.
FAQs
How do I begin the business plan writing process?
To start your business plan, conduct thorough research on your target market, industry trends, and competitor analysis. Gather all essential information to form a strong foundation for your plan.
What are the key elements of a business plan?
A typical business plan includes sections like executive summary, company description, market analysis, organization and management structure, products or services offered, marketing and sales strategies, funding requests, financial projections, and an appendix.
How long should a business plan be?
The length of a business plan can vary depending on the complexity and size of your business. However, it is recommended to keep it concise, ideally around 20-40 pages.
How can I make my business plan stand out to potential investors?
To impress investors, focus on presenting a clear and compelling story about your business, highlighting its unique value proposition, and demonstrating a solid understanding of the market and financial projections.
Can I use a business plan template to write my plan?
Yes, business plan templates can be a helpful starting point. However, make sure to customize the template according to your business’s specific needs and goals to create a unique and tailored plan.
Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.